Minimum wage – Council of State to decide on maintenance of allowances/three year bonuses, amounting to 198 euros

The retention or not of the three year bonuses, that is a raise for every three years an employee has been employed, in the minimum wage – for those who are entitled to it – is judged by the final decision of the supreme court (Council of State), which is pending for 2.5 years.

The three-year allowances are entitled – according to an older memorandum law – only to employees who had the necessary previous service on February 14, 2012.

These employees will receive the new minimum wage (increased by 2%) on January 1st, while along with the basic amount, the pre-service allowances for those who are entitled to them will also increase.

On the contrary, those who were hired from February 2012 onwards are not entitled to the three-year increase.

The pre-service allowances (three years) are judged in the Council of State after the appeal of federation of industries SEV and other industry associations of Greece. The appeal is directed against the circular of the former Minister of Labor, Ms. Efi Ahtsioglou, which – on February 18, 2019 – gave instructions on how to calculate the “frozen” three year allowances, during the process of implementing the – then – new minimum wage (650 euros).

The representatives of the industrialists demand that the minimum wage be applied “bare for all”. That is, without the 3 year bonuses, not even for those who met the conditions in 2012. They claim that the surcharges were abolished, since the implementation of the Voutsis law, which determines the new way of determining the minimum wage increases. This is because with the Vroutsis law – according to the interpretation of SEV – as a minimum wage is meant “a unique value (amount) of reference”.

What is being adjudicated

Thus, the Council of State is called upon to decide whether the “frozen” three year bonuses from 2012 will continue to exist, or whether they have been abolished.

If the decision of the Supreme Court is positive for the employees, then the existing salaries should continue to be paid at the current levels, while the new salaries – from January 1, 2022 – will have service surcharges (three years).

But if the decision is negative for the workers – that is, if the appeal of the industrialists is accepted – then thousands of employees will lose their previous service allowances. As there is a ceiling for the surcharge due to previous service at 30%, the maximum amount of bonuses at stake reaches up to 198.9 euros per month.

The question in this case is whether the court will allow retroactivity to a possible negative decision. That is, whether the return of the benefits (three year bonuses) that the employees have already received, from February 2019 onwards, will be requested – retrospectively.